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Social Gaming Shows Potential

Maturing market attractive for brands

Social gaming has become an online phenomenon. Thanks to the massive popularity of Facebook and the addictive appeal of real-time simulation games, social gaming has gained widespread adoption.

The runaway success of FarmVille and other social games such as Zoo World, Happy Aquarium, Pet Society and Restaurant City has spawned an industry that generated an estimated $725 million in the US alone in 2009 and is expected to triple by 2012, according to ThinkEquity.

“The success of social gaming is part of a broader transformation to more casual, socially interactive environments,” said Paul Verna, eMarketer senior analyst and author of the new report, “Social Gaming: Virtual Crops Yield Real Profits.” “Forecasts call for continued growth in the social gaming audience, and companies that have built their businesses in the traditional video game industry are shifting resources toward this newer form of game play.”

Trendstream and Lightspeed Research estimated that 25% of US Internet users ages 16 to 64 played social games monthly in February 2010. Based on eMarketer’s estimate of 160 million US Internet users ages 18 to 64 (the closest age range to Trendstream/Lightspeed’s survey), this represents nearly 40 million users.

Relatively few of those gamers are paying to play or to purchase virtual goods and currency, although those revenue streams make up a large percentage of total social gaming dollars. Other marketing opportunities abound, including custom games, product placements, in-game items, display ads and other branding plays.

“Economic factors could affect the future of social gaming, and consumer behavior remains an unknown,” said Mr. Verna. “Playing addictive games that simulate farms, restaurants or mob families could be a long-term business proposition, but it could also be the ultimate fad.

“If interest in these types of activities evaporates as quickly as it materialized, the social gaming industry could experience the same plunge as happened with virtual worlds,” he said.

Check out today’s other article, “Canadian Mobile Subscriptions to Climb 20% by 2014.”

The full report, “Social Gaming: Virtual Crops Yield Real Profits,” also answers these key questions:

  • How many people in the US are playing social games?
  • How much revenue do social games generate?
  • What are the demographic characteristics of the social gaming population?
  • How are these games monetized?
  • Who are the top social game publishers and which titles are most popular?
  • How will tensions between leading game publishers and social networks affect the future of the industry?

To purchase the report, click here. Total Access clients, log in and view the report now.

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